tag:theconversation.com,2011:/au/topics/cryptomarkets-13654/articlesCryptomarkets – The Conversation2018-08-16T13:38:08Ztag:theconversation.com,2011:article/1014202018-08-16T13:38:08Z2018-08-16T13:38:08ZThe darknet is not a hellhole, it's an answer to internet privacy<figure><img src="https://images.theconversation.com/files/231892/original/file-20180814-2924-1pkzdbk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=496&amp;fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/cyber-security-metallic-combination-lock-inbuilt-1068036806?src=N4xggQRHvPKnQ6BlwvUQRw-2-67">Sergey Tarasov</a></span></figcaption></figure><p>On the back of scandals such as those that engulfed the <a href="https://theconversation.com/privacy-2013-from-snowden-to-facebook-to-amazons-drones-20353">NSA</a> and <a href="https://theconversation.com/cambridge-analyticas-closure-is-a-pyrrhic-victory-for-data-privacy-96034">Cambridge Analytica</a>, online privacy and data protection have become major political concerns. Many of us <a href="http://time.com/4673602/terms-service-privacy-security/">worry that</a> private companies and governments know more about us than our closest friends and relatives. </p>
<p>One alternative is to switch to the darknet, which offers anonymity and protection from those who keep track of what people do online. Yet it is controversial, to say the least. The darknet has been associated with everything from drug and weapons dealers to child porn, hitmen and identity thieves. Even the name suggests a dark, sinister space. Yet when you actually investigate this encrypted network, the reality is a bit more complicated. And it’s time to call the darknet’s sleazy reputation into question. </p>
<p>The darknet is a worldwide decentralised network of hundreds of computers, whose owners configure them and contribute internet bandwidth to create a series of routing points or nodes. These nodes feature a form of layered encryption, that often <a href="https://www.geeksforgeeks.org/onion-routing/">gets compared</a> to an onion – hence the collective name <a href="https://www.torproject.org">The Onion Routing network</a>, or Tor for short. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/231893/original/file-20180814-2891-1096aqs.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/231893/original/file-20180814-2891-1096aqs.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" srcset="https://images.theconversation.com/files/231893/original/file-20180814-2891-1096aqs.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/231893/original/file-20180814-2891-1096aqs.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/231893/original/file-20180814-2891-1096aqs.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/231893/original/file-20180814-2891-1096aqs.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/231893/original/file-20180814-2891-1096aqs.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/231893/original/file-20180814-2891-1096aqs.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Onion ring.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bratislava-slovakia-july-3-2018-tor-1126165718?src=Nc6LIKgz1pro6QADBCDmtw-1-8">Pe3k</a></span>
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<p>Onion routing was originally developed in the 1990s by the US Naval Research Laboratory to protect US intelligence communications online. Free Tor software was first made publicly available in 2002, and the not-for-profit <a href="https://www.torproject.org">Tor project</a> was set up in 2006 to maintain the system. It has received funding over the years from governments, NGOs, foundations and companies, as well as thousands of personal donations. </p>
<p>Since April, <a href="https://metrics.torproject.org">between</a> 2m to 2.5m people use Tor worldwide every day. The number fluctuates greatly over time; there was a short-term peak in the fourth quarter of 2013, for instance. This was perhaps related to the emerging popularity of so-called cryptomarkets like <a href="https://www.wired.com/2015/04/silk-road-1/">Silk Road</a>, when global traffic reached almost 6m. In the UK at that time, the user base rose to 157,000 – now it’s more like 70,000. </p>
<h2>The darknet goes dark</h2>
<p>The launch of Silk Road in 2011 has much to do with the controversy around the darknet. The first of its kind, Silk Road <a href="https://www.forbes.com/sites/niallmccarthy/2018/03/22/where-guns-are-sold-through-the-darknet-infographic/#6fb4627e647a">was a market space</a> for everything from firearms to illegal drugs. By the <a href="https://theconversation.com/end-of-the-silk-road-how-did-dread-pirate-roberts-get-busted-18886">time</a> it was <a href="https://www.forbes.com/sites/andygreenberg/2013/10/02/end-of-the-silk-road-fbi-busts-the-webs-biggest-anonymous-drug-black-market/">busted</a> by the FBI in October 2013, the media was essentially equating it with the entire darknet. <a href="https://www.richardvanhooijdonk.com/en/blog/complex-dangerous-disturbing-underworld-darknet/">Subsequent reports</a> about drug crime, child porn and hitman services only strengthened the association. </p>
<p>Few would <a href="https://www.cyberscoop.com/tor-dark-web-andrew-lewman-securedrop/">disagree today</a> that the darknet attracts a lot of criminal activity, so what’s the case for the defence? For one thing, the network offers safe space to many activities that require anonymity. Socially sensitive communications are a <a href="https://www.jstor.org/stable/j.ctt13x07xx">good example</a> – such as forums for people who have survived rape or child abuse. Journalists use Tor to interact more safely <a href="https://darkwebnews.com/dark-web/how-whistleblowers-use-the-darknet-for-good/">with whistleblowers</a>, while it enables activists in repressive regimes to communicate politically sensitive information – the likes of Human Rights Watch actually <a href="https://openscholarship.wustl.edu/law_globalstudies/vol11/iss3/6/">encourage</a> this. </p>
<p>When my colleague at the University of Aberdeen, Hanifi Baris, was <a href="https://www.pressandjournal.co.uk/fp/news/aberdeen/1514218/outspoken-aberdeen-university-academic-has-been-arrested/">recently arrested</a> by the Turkish authorities for sharing anti-Erdoğan information on Facebook and Twitter, it underlined the importance of the darknet as an outlet for protest. There was a rather telling <a href="https://metrics.torproject.org">sharp peak</a> in Tor users in Turkey during the last presidential elections in June. </p>
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<a href="https://images.theconversation.com/files/231894/original/file-20180814-2906-118b3aw.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/231894/original/file-20180814-2906-118b3aw.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" srcset="https://images.theconversation.com/files/231894/original/file-20180814-2906-118b3aw.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=298&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/231894/original/file-20180814-2906-118b3aw.png?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=298&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/231894/original/file-20180814-2906-118b3aw.png?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=298&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/231894/original/file-20180814-2906-118b3aw.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=375&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/231894/original/file-20180814-2906-118b3aw.png?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=375&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/231894/original/file-20180814-2906-118b3aw.png?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=375&amp;fit=crop&amp;dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The Twitter campaign.</span>
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<p>When it comes to illicit drugs, darknet services can be a safer option for people who would take drugs anyway. Buyers avoid the risk of physical violence that comes with scoring on the street. Buyer reviews put pressure on darknet dealers to sell drugs of decent <a href="https://serval.unil.ch/resource/serval:BIB_670B021B4620.P001/REF">quality</a> – <a href="https://www.sciencedirect.com/science/article/pii/S0955395915003503">albeit</a> some reviewers <a href="https://www.sciencedirect.com/science/article/pii/S095539591630130X?via%3Dihub">will have</a> more expertise than others and experiences are always going to be somewhat subjective. </p>
<p>At any rate, the darknet has amassed a collectively built database of knowledge and shared experiences about drug consumption in cryptomarkets that can offer guidance and support for anyone who wants to use them. Given that drugs always vary in strength and purity depending on the seller and the batch, this information can be incredibly important – and often much more helpful than a generic forum or drug info website. </p>
<p>As for some of the other illegal activities on the darknet, child pornography is banned in most cryptomarkets, for example, while hitman services <a href="https://darkwebnews.com/scams/sicilian-hitmen-scam/">have usually</a> turned out to be scams. Additionally, the darknet does not turn people into drug addicts, arms dealers, assassins or paedophiles. The decision to engage in such activities usually happens outwith that space.</p>
<h2>Darknet/clearnet</h2>
<p>The conventional internet is not merely a platform for us to communicate, game, shop, download and so on. These activities all feed valuable data to governments and companies. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/231895/original/file-20180814-2894-1p1eqyh.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/231895/original/file-20180814-2894-1p1eqyh.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" srcset="https://images.theconversation.com/files/231895/original/file-20180814-2894-1p1eqyh.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=683&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/231895/original/file-20180814-2894-1p1eqyh.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=683&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/231895/original/file-20180814-2894-1p1eqyh.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=683&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/231895/original/file-20180814-2894-1p1eqyh.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=858&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/231895/original/file-20180814-2894-1p1eqyh.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=858&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/231895/original/file-20180814-2894-1p1eqyh.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=858&amp;fit=crop&amp;dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Eye cloud.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bratislava-slovakia-july-3-2018-tor-1126165718?src=Nc6LIKgz1pro6QADBCDmtw-1-8">Lightspring</a></span>
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<p>Most of us are surrounded by personal devices that are almost always online, and we’ve made ourselves open to massive marketisation, exploitation, monitoring, control and repression. It’s the hefty price we pay for internet freedom – and new legal frameworks like the General Data Protection Regulation (GDPR) <a href="https://theconversation.com/gdpr-isnt-enough-to-protect-us-in-an-age-of-smart-algorithms-97389">will not</a> significantly change this. </p>
<p>The darknet is hardly a panacea in this regard, but it does allow people to <a href="https://www.rollingstone.com/politics/politics-news/the-darknet-is-the-government-destroying-the-wild-west-of-the-internet-198271/">reclaim privacy</a> and protect their identities online. Admittedly there are limits to this: Tor enables users to hide their geographical location, but any data you provide once you are inside a website is accessible to whoever is running it, plus any organisations they may collaborate with. Log in to gmail from Tor and your emails are not private (try ProtonMail or Snapchat instead). Every Twitter search via Tor is logged like it is for any user – just like it is for Amazon and so on. </p>
<p>Another major problem is the speed of Tor, which depends on the number of nodes on the available bandwidth. Everything is slowed down by the secure encryption and user anonymity built into the structure. Although Tor has gained markedly in speed and security since its inception, it is still slower than the conventional internet. </p>
<p>This compromise between speed and exposure/protection will probably continue for the foreseeable future. If you want to help, however, you might consider running a relay. Everyone is invited to collaborate – here’s <a href="https://blog.torproject.org/new-guide-running-tor-relay">a guide</a> explaining what to do. Instead of shunning the darknet as a badland for bad people, it’s time more of us saw its potential as a force for good.</p><img src="https://counter.theconversation.com/content/101420/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andreas Zaunseder does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The case for all things Tor.Andreas Zaunseder, Doctoral Fellow, Centre for Citizenship, Civil Society and Rule of Law, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/925812018-03-07T02:54:09Z2018-03-07T02:54:09ZPhenibut, online drug markets and the limits of law enforcement<p>Seven high school students in Queensland were taken to hospital last month after <a href="https://www.sbs.com.au/news/queensland-students-critical-overdose-suspected">reportedly</a> overdosing on a substance identified as <a href="https://theconversation.com/weekly-dose-phenibut-the-russian-anti-anxiety-drug-linked-to-gold-coast-teens-overdoses-92339">Phenibut</a>. It’s an anti-anxiety drug developed for Russian cosmonauts that also has cognitive-enhancing qualities.</p>
<p>According to the Australian Therapeutic Goods Administration, Phenibut is a <a href="https://www.tga.gov.au/book-page/33-phenibut">Schedule 9 prohibited substance</a>, which means that it cannot be sold legally in this country. Nevertheless, according to <a href="http://www.news.com.au/lifestyle/health/health-problems/police-seize-mobile-phones-in-investigation-into-school-overdose/news-story/ace12f1eadfe40bd2bcce3c471a4d05f">reports</a>, the students were able to buy the drug online and have it delivered to them on the Gold Coast. </p>
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Read more:
<a href="http://theconversation.com/weekly-dose-phenibut-the-russian-anti-anxiety-drug-linked-to-gold-coast-teens-overdoses-92339">Weekly Dose: phenibut – the Russian anti-anxiety drug linked to Gold Coast teens' overdoses</a>
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<p>This incident reveals the limits of law enforcement practices developed over the 20th century in relation to more traditional drug markets. Current strategies for policing drugs would not have prevented these young people from gaining access to Phenibut. </p>
<h2>Why are online drug markets different?</h2>
<p>While conventional illicit drug markets have relied on physical exchanges of drugs, the internet has created new opportunities for illicit drug markets to flourish through both the “dark” net and the “surface” net.</p>
<p>“Dark net marketplaces” or <a href="https://theconversation.com/explainer-what-are-drug-cryptomarkets-64596">cryptomarkets</a> operate in the hidden portion of the internet. Cryptomarkets are online forums that enable the trade of goods between individuals who use digital encryption to conceal their identities. Although cryptomarkets offer many types of illegal goods and services (and some legal services), the most commonly purchased items are illicit drugs. </p>
<p>Most illicit drugs sold through cryptomarkets are those taken by recreational drug users (for example, cannabis-related products, stimulants, pharmaceuticals). The heavy presence of recreational drugs is linked to the fact that planning purchases ahead of time and waiting for shipments will not suit individuals who need immediate access to illicit substances, such as dependent drug users.</p>
<p>In contrast to buying Phenibut from the surface net, as the Gold Coast students allegedly did, purchasing from a cryptomarket is a technologically challenging endeavour. These websites are not accessible through familiar search engines; a specialised anonymising browser, the specific URL address of the marketplace, and the possession of cryptocurrency (such as <a href="https://theconversation.com/what-is-bitcoin-it-is-not-that-complicated-if-you-ignore-the-geek-speak-46512">Bitcoin</a>) are required to perform the transaction. </p>
<p>The term surface web refers to all of the content accessible through popular search engines (such as Google). It contains the sites most people use in their everyday browsing. Drug markets that operate through the surface net often fall into legal grey areas. This is a consequence of significant legislative variation across jurisdictions regarding the production, distribution and possession of some drugs – particularly those that are not specifically identified as illicit in various international conventions and protocols. </p>
<p>The drugs most commonly sold in the surface web drug markets are new psychoactive substances (otherwise known as “research chemicals”, “legal highs” and “bath salts”) and counterfeit versions of prescription-required pharmaceuticals. The surface web drug trade mostly revolves around access to lifestyle drugs such as performance and image-enhancing substances.</p>
<p>This is the context in which people are able to get Phenibut with relative ease. It could be bought through the surface web, using Google to locate a web store willing to ship the product to Australia after an electronic funds transfer. </p>
<p>Even though Phenibut is a scheduled substance in Australia, it is likely that the servers for many of these retail web stores are located in countries where it is entirely legal to manufacture, possess and distribute the drug.</p>
<h2>What does this mean for drug control strategies?</h2>
<p>Dominant models for controlling illicit drugs mostly work through a combination of prohibition and targeted law enforcement crackdowns on local drug markets. These approaches are grounded in broader criminological understandings that offenders rationally consider the costs and benefits of an act, and that the perceived and actual threat of punishment deters crime. Such models have been <a href="http://www.ijdp.org/article/S0955-3959(05)00056-3/abstract">widely criticised</a> for their ineffectiveness and negative health consequences.</p>
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Read more:
<a href="http://theconversation.com/small-potent-doses-of-illegal-drugs-are-evading-authorities-but-having-a-huge-impact-87081">Small potent doses of illegal drugs are evading authorities but having a huge impact</a>
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<p>Admittedly, online drug markets represent only a small portion of the overall global drug trade. Taking into account the ubiquitous nature of the surface web, and the relative ease of acquiring drugs like Phenibut, such markets are likely to grow.</p>
<p>Following the Queensland case, police were quick to <a href="http://www.news.com.au/national/queensland/crime/police-crackdown-on-online-drug-trade/news-story/16cea5d388f39bc110e3c590787db43e">announce</a> a number of seizures of various illicit substances that had been “trafficked” through the domestic mail stream. </p>
<p>Methods for policing online drug markets are relatively new and still being developed. These appear to adopt <a href="https://www.businessinsider.com.au/methods-that-police-use-to-catch-deep-web-drug-dealers-2016-8">similar approaches</a> to those used to address conventional drug markets, even though it is likely that online markets attract different types of customers and operate according to different principles. New strategies are needed that help to reduce harm by better understanding the nature of buyers in these digital domains.</p><img src="https://counter.theconversation.com/content/92581/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The increasing availability of drugs online raises questions about policing methods that were developed to deal with more traditional drug markets.Andrew Childs, Doctoral Candidate, Griffith UniversityMelissa Bull, Associate Professor, School of Criminology and Criminal Justice, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/911682018-02-11T08:17:05Z2018-02-11T08:17:05ZWhy it would be in everybody's interests to regulate cryptocurrencies<figure><img src="https://images.theconversation.com/files/205238/original/file-20180207-74506-nil6pg.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=496&amp;fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>There are growing <a href="http://www.wired.co.uk/article/six-ways-to-regulate-cryptocurrency-without-destroying-its-future">calls</a> for regulation of the cryptocurrency market, which is rapidly approaching a market capitalisation of <a href="https://www.cnbc.com/2017/12/18/cryptocurrencies-could-be-worth-1-trillion-in-2018-blockchain-ceo.html">$1 trillion</a>. But there’s little agreement about the forms this should take.</p>
<p>If the case for government regulation is strong, the case for a clear, coordinated regulatory approach is even stronger. It would increase the flow of institutional capital into cryptocurrency markets. And that would further strengthen corporate governance in cryptocurrency companies.</p>
<p>The trick for regulators is to balance investor protection and systemic stability with the need to protect innovation and encourage capital formation in different legal systems.</p>
<p>At present the regulatory environment is a muddle because there’s rapid divergence in the regulation of cryptocurrencies across jurisdictions. Countries like Japan, while thorough, have a more open approach. China is more strict. </p>
<p>Sovereign governments need to develop coherent frameworks for cryptocurrency oversight. But solutions will only be found through international cooperation in this cross-border market.</p>
<h2>Growing concerns</h2>
<p>Cryptocurrencies <a href="https://cointelegraph.com/bitcoin-for-beginners/what-are-cryptocurrencies">originated</a> as an alternative payment mechanism to traditional currencies. But they are now also <a href="http://www.cftc.gov/bitcoin/index.htm">traded</a> on spot exchanges as highly speculative investment assets. </p>
<p>Recent spin-off crowd funding opportunities such as <a href="http://bitcoinafrica.io/2017/09/08/sarb-says-no-protection-for-ico-investors/">initial coin offerings</a> have become a particular cause of concern. These involve startup cryptocurrency companies offering initial investment stakes in new token issues. China and Vietnam have <a href="https://www.ft.com/content/05b2748c-c903-11e7-aa33-c63fdc9b8c6c">banned</a> them. Japan has taken a friendlier <a href="https://www.wsj.com/articles/regulators-are-looking-at-cryptocurrency-1516836363">attitude</a> while the UK and the US have adopted a wait and see approach. South Africa, like many other developing countries, offers zero protection to investors in initial coin offerings.</p>
<p>These different responses are due to different legal definitions of cryptocurrencies. The rapidly evolving technology behind them doesn’t help the situation either.</p>
<p>The precise nature of an initial coin offerings depends on its structure as well as its context which can change quickly and have hybrid characteristics of financial instruments. </p>
<p>The definition, and hence legal treatment, of the tokens issued under an initial coin offering can be as diverse as a currency, commodity, security, property, loan, deposit, derivative or forex contract. Agreeing a taxonomy of cryptocurrencies defined by how they’re used is clearly one of the most urgent tasks facing regulators.</p>
<h2>Towards a taxonomy of cryptocurrencies</h2>
<p>Cryptocurrency expert <a href="https://new.innovatefinance.com/news/lawrence-wintermeyer-steps-ceo-innovate-finance/">Lawrence Wintermeyer</a> has argued that distributed ledger technology powered digital assets could be organised into three potential buckets: cryptocurrencies, cryptocommodities, and <a href="https://www.forbes.com/sites/lawrencewintermeyer/2018/01/07/my-2018-crypto-predictions/#6294e3976b71">cryptotokens</a>. </p>
<p>But the lack of harmonisation across jurisdictions is a wider problem than nomenclature.</p>
<p>Cryptocurrency companies sometimes use the distributed nature of these assets – which sit on digital ledgers held by multiple token holders – to argue that there is no issuer. They also sometimes argue that these assets are not securities, and that they should therefore not be subjected to a particular jurisdiction’s securities laws.</p>
<p>There are also clear cross border regulatory <a href="https://www.ft.com/content/32315636-cb01-11e7-ab18-7a9fb7d6163e">gaps</a>. What makes it difficult to reconcile these is that the assets can easily be transferred and their origins are difficult to trace. Tokens could be issued in a more token-friendly jurisdiction like Japan. The same tokens could land up in the hands of unassuming retail investors in stricter jurisdictions such as the US. </p>
<h2>Avoiding money laundering and financial crime</h2>
<p>This cross border confusion allows token companies to pick and choose jurisdictions with favourable rules. This could make money laundering easier.</p>
<p>There are a few steps governments can take to close these gaps.</p>
<p>They should support investment in technology that makes the provenance of tokens clearer while preserving their encryption. Regulators could then enforce an “indicator of origin” as a standard. This would make it less easy for the assets to be transferred illegally.</p>
<p>Offshore centres like Jersey <a href="https://www.ft.com/content/e591541e-007e-11e6-99cb-83242733f755">have got a lot of bad press</a> in the recent backlash against international financial centres. But there’s a great deal to learn from well-regulated offshore jurisdictions. They are beginning to take the lead with potential applications of international best practice and corporate governance for cryptocurrencies. They offer investors in digital assets an extra set of gatekeepers’ eyes, and potentially, a more calculated risk. </p>
<p>In jurisdictions like Jersey issuers of initial coin offerings have to jump through quite a few hoops. This includes using a regulated service provider which has to make an application to the Jersey companies registry for a consent. The service provider is among a number of <a href="https://www.gov.je/News/2017/Pages/InitialCoinOfferings.aspx">requirements</a> that provide checks in relation to anti-money laundering and countering the financing of terrorism.</p>
<h2>Current frameworks and global co-ordination</h2>
<p>But what could a coordinated global regulatory approach to cryptocurrencies look like?</p>
<p>Harmonisation via a code of conduct or voluntary signatory to a global compact could certainly stop token companies from cherry picking jurisdictions to their advantage. Not being signatories to the codes would place token companies outside the market. </p>
<p>A multilateral code of conduct or global convention or compact, such as those administered by the inter-governmental <a href="http://www.fatf-gafi.org/">Financial Action Task Force on Money Laundering</a>, or a United Nations co-ordinated approach could be model solutions. </p>
<p>Standard regulatory codes are particularly critical for some pockets of the investment community. For example, there has been a significant <a href="https://cointelegraph.com/news/institutional-investors-will-bet-big-on-cryptocurrencies-in-2018">surge</a> in the establishment of investment funds looking to invest in initial coin offerings on behalf of sophisticated investors. </p>
<p>Standard codes for institutional investors in the first instance, could help both regulation as well as innovation. Institutional investors, unlike retail investors, can withstand, and even benefit from, the upside of volatility over time. </p>
<p>For now, the poorly regulated speculative hoarding of cryptocurrencies reduces the potential of assets like this to become a public good. This ultimately affects the potential value of the tokens by amplifying volatility.</p>
<p>Paying attention to this is important for investors and regulators as well as issuers. There will also have to be a degree of self regulation by issuers as global regulators get up to speed.</p><img src="https://counter.theconversation.com/content/91168/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Desné Masie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While sovereign governments need to develop coherent frameworks to regulate cryptocurrency, permanent solutions will be found through international co-operation.Desné Masie, Visiting Researcher in International Political Economy, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/645962016-09-01T20:18:58Z2016-09-01T20:18:58ZExplainer: what are drug cryptomarkets?<figure><img src="https://images.theconversation.com/files/136044/original/image-20160831-826-r698pr.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=496&amp;fit=clip" /><figcaption><span class="caption">The average user is a male in his 20s.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-336271154/stock-photo-late-night-internet-addiction-or-working-late-man-using-laptop-computer-in-the-dark.html?src=79rRayu7g4WO29XqTRogEA-2-2">Brian A Jackson/Shutterstock</a></span></figcaption></figure><p>When we first discovered Silk Road, we could not believe it was real. People were buying illegal drugs anonymously through a global marketplace that resembled eBay or Amazon. It was a <a href="https://theconversation.com/the-internet-poses-unique-challenges-for-drug-prohibition-6262">brazen challenge</a> to the prohibition of drugs.</p>
<p>Silk Road was the first drug “cryptomarket”. Many similar marketplaces followed after the FBI took it down in 2013. </p>
<p>Today there are <a href="https://www.deepdotweb.com/2013/10/28/updated-llist-of-hidden-marketplaces-tor-i2p/">more than 20 cryptomarkets</a> selling illicit drugs, or more than 55 if single-vendor markets are included.</p>
<p>On Tuesday, the <a href="http://www.ijdp.org/">International Journal of Drug Policy</a> published the first special issue on drug cryptomarkets, which we guest-edited. <a href="http://www.ijdp.org/issue/S0955-3959%2816%29X0012-6">All papers are open-access</a> until 31 October. </p>
<h2>What are they and how do they work?</h2>
<p>Cryptomarkets host multiple sellers or “vendors”, provide participants with anonymity via their location on the hidden web and the use of <a href="https://theconversation.com/au/topics/cryptocurrency-8321">cryptocurrencies</a> for payment, and aggregate and display customer feedback ratings and comments.</p>
<p>The hidden web, also known as the <a href="https://theconversation.com/explainer-what-is-the-dark-web-46070">dark web</a>, can only be accessed using anonymising software that masks the internet user’s identity. Cryptocurrencies, the most famous of which is <a href="https://theconversation.com/what-is-bitcoin-it-is-not-that-complicated-if-you-ignore-the-geek-speak-46512">Bitcoin</a>, are digital, non-identity-carrying forms of cash. </p>
<p>Drugs are usually sent through regular postal services, with vendors typically using stealth techniques to increase the chances that the goods will arrive undetected. While some buyers have elaborate systems to evade detection (drop points, alter egos, and so on), <a href="https://www.reddit.com/r/DarkNetMarketsNoobs/wiki/step-by-step">how-to guides advise buyers</a> to use their real names and addresses to receive deliveries that are generally sent in standard business envelopes.</p>
<h2>What drugs are sold?</h2>
<p>The most popular drugs on cryptomarkets are remarkably consistent from market to market and across time.</p>
<p>Whether by counting the number of <a href="http://www.ijdp.org/article/S0955-3959%2816%2930226-2/fulltext">listings placed by vendors</a>, or by counting customer feedback ratings to <a href="http://www.ijdp.org/article/S0955-3959%2816%2930133-5/fulltext">estimate sales revenue</a>, the drugs that dominate these marketplaces are cannabis, ecstasy/MDMA, stimulants (such as amphetamine and cocaine), and pharmaceuticals (such as sedatives and performance enhancers). </p>
<p>Cryptomarkets appear so far to serve recreational and “party” drug users more than dependent or problem drug users. </p>
<h2>Are they better quality?</h2>
<p>Cryptomarket users describe the drugs bought there as <a href="http://www.ijdp.org/article/S0955-3959%2816%2900033-5/fulltext">better quality</a> and <a href="http://www.ijdp.org/article/S0955-3959%2816%2930132-3/fulltext">more likely to be pure</a>. </p>
<p>Through laboratory testing, <a href="http://energycontrol.org/international.html">Energy Control</a> has confirmed drugs such as cocaine were <a href="http://www.ijdp.org/article/S0955-3959%2816%2930130-X/fulltext">higher in purity and less likely to be cut</a> when obtained through cryptomarkets than through more traditional sources. </p>
<p>But it’s important to remember <a href="http://www.ijdp.org/article/S0955-3959(15)00350-3/fulltext">drug purity is not the same as drug quality</a>. Some people may praise drug combinations for their unique effects, while others may consider these “adulterated”. </p>
<p>In addition, cryptomarkets do not always sell pure or unadulterated products. Last year, a <a href="https://www.deepdotweb.com/2015/10/17/warning-fentanyl-being-sold-as-heroin/">warning was circulated</a> about drugs sold as heroin on cryptomarkets actually containing <a href="https://theconversation.com/fentanyl-and-other-synthetic-opioids-sold-as-counterfeits-in-deadly-new-trend-62814">fentanyl, a particularly potent opioid</a>. </p>
<h2>Who is buying them?</h2>
<p>Four papers in the special edition surveyed or interviewed people who obtained drugs from cryptomarkets (<a href="http://www.ijdp.org/article/S0955-3959(15)00350-3/fulltext">1</a>, <a href="http://www.ijdp.org/article/S0955-3959(16)30098-6/fulltext">2</a>, <a href="http://www.ijdp.org/article/S0955-3959(16)00033-5/fulltext">3</a>, <a href="http://www.ijdp.org/article/S0955-3959(15)00363-1/fulltext">4</a>). In all cases, the profile of participants was mainly male (at least 80%) and aged in the early- to mid-20s.</p>
<p>Most people who buy drugs from cryptomarkets had already established their drug-use careers. But <a href="http://www.ijdp.org/article/S0955-3959(16)30098-6/fulltext">a small number</a> used cryptomarkets to buy drugs for the first time or to reengage with drug use after long periods of abstinence. </p>
<h2>How do they affect broader drug markets?</h2>
<p>Cryptomarkets do not solely cater for the drug consumer. They also play a brokerage role at the wholesale level. <a href="http://www.ijdp.org/article/S0955-3959(16)30133-5/fulltext">One quarter of estimated revenue</a> was derived from wholesale transactions and <a href="http://www.ijdp.org/article/S0955-3959(16)30132-3/fulltext">one quarter of survey respondents</a> reported obtaining drugs through cryptomarkets to supply to others. </p>
<h2>Do cryptomarkets reduce drug market violence?</h2>
<p>According to <a href="https://www.globaldrugsurvey.com/">Global Drug Survey</a> data, cryptomarket customers report <a href="http://www.ijdp.org/article/S0955-3959(16)30132-3/fulltext">fewer incidents of violence</a> when purchasing from cryptomarkets than their preferred alternative source, usually friends or dealers they knew.</p>
<p>Conflict may <a href="http://www.ijdp.org/article/S0955-3959%2816%2930133-5/fulltext">manifest in other forms</a> including damage to reputation via “doxxing” (gaining access to personal information and threatening exposure), other forms of blackmail, theft, fraud and cyber-bullying. <a href="http://www.ijdp.org/article/S0955-3959%2815%2900363-1/fulltext">Vendors may scam buyers</a>, buyers may scam vendors, and through “exit scams”, administrators may close the entire marketplace and abscond with funds, in some cases millions of dollars.</p>
<p>While cryptomarkets enable a globalisation and flattening of drug trading, international trading is not an inevitable outcome. <a href="http://www.ijdp.org/article/S0955-3959(16)30172-4/fulltext">Willingness to ship internationally</a> was associated with smaller weight of packages, lower vendor feedback ratings, and lower perceived effectiveness of law enforcement in the country from which vendors shipped. </p>
<p>Vendors in countries with wealthier populations and higher drug expenditure were less willing to ship internationally. </p>
<h2>Beyond drugs</h2>
<p>Cryptomarkets are not only places to trade drugs and other commodities or services. Famously, Silk Road had a <a href="http://reason.com/blog/2013/08/20/silk-road-proprietor-says-libertarian-mi">libertarian mission</a> to support only minimal state intervention in the lives of citizens.</p>
<p>Libertarian discourses that permeated Silk Road <a href="http://www.ijdp.org/article/S0955-3959(16)30174-8/fulltext">sharply declined across the cryptomarket ecosystem following its closure</a>. New cryptomarkets emerged, perhaps built with different primary motives. </p>
<p>Despite this decline, cryptomarkets can still be understood as a form of political activism and resistance of dominant paradigms. These markets fall outside of state control, relying instead on informal governance and community self-regulation.</p>
<h2>What does the future hold for cryptomarkets?</h2>
<p>While trends indicate <a href="http://motherboard.vice.com/read/more-people-than-ever-say-they-get-their-drugs-on-the-dark-web">increased usage rates of drug cryptomarkets over time</a>, there may be limits to their growth. </p>
<p>One challenge could occur through <a href="http://fortune.com/2015/07/29/tor-vulnerability/">compromises to the technologies</a> on which cryptomarkets rely (such as Tor and Bitcoin). </p>
<p>Second, marketplace regulatory mechanisms could be compromised through the eroding of trust through undercover law-enforcement infiltration and exit scams. </p>
<p>Third, drug buyers may perceive greater risks purchasing through cryptomarkets than through conventional drug deals.</p>
<p>Regardless of these potential challenges, innovations are occurring rapidly, with <a href="https://blog.surfwatchlabs.com/2016/07/05/top-dark-web-markets-hansa-piracy-and-exit-scams/">some markets</a> designed to make it impossible for administrators to abscond with funds. </p>
<p>If it becomes easier to obtain cryptocurrencies and their use even more difficult to trace, we may see a dramatic upswing in the use of cryptomarkets by drug sellers and their drug-buying customers.</p><img src="https://counter.theconversation.com/content/64596/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Monica Barratt receives funding from the National Health and Medical Research Council. She is also Director of Research at Bluelight.org, a not-for-profit harm reduction website.</span></em></p><p class="fine-print"><em><span>Judith Aldridge has been funded in the UK from the Economic and Social Research Council, the innovation charity NESTA, and the Netherlands Ministry of Security and Justice.</span></em></p>Today, there are more than 20 cryptomarkets selling illicit drugs, or more than 55 if single-vendor markets are included.Monica Barratt, NHMRC Post-Doc Research Fellow, National Drug and Alcohol Research Centre, UNSWJudith Aldridge, Professor; Deputy Director of Research and Director of Postgraduate Research, School of Law, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/314652014-10-10T01:12:26Z2014-10-10T01:12:26ZDigital refugees flee via Silk Road to black markets in drugs<figure><img src="https://images.theconversation.com/files/60845/original/p972kwc7-1412560091.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=496&amp;fit=clip" /><figcaption><span class="caption">The Silk Road was once a river of commerce across continents. It lives again on the ‘dark net’, that part of the internet that operates on the encrypted TOR network.</span> <span class="attribution"><span class="source">Wikimedia Commons</span></span></figcaption></figure><p>Recent media reports have once again put the public spotlight on cryptomarkets, the eBay-style websites operating on the encrypted dark net. They facilitate a vast and anonymous global trade in black market goods and services, particularly illicit drugs. </p>
<p>To date, only <a href="http://www.forbes.com/sites/andygreenberg/2014/02/12/five-men-arrested-in-dutch-crackdown-on-silk-road-copycat/">two cryptomarkets have been taken offline</a> by state authorities. The biggest success for law enforcement – the much-lauded FBI operation that shut down the infamous Silk Road – resulted in only a <a href="https://media.gractions.com/314A5A5A9ABBBBC5E3BD824CF47C46EF4B9D3A76/5f8d4168-c36a-4f78-b048-f5d48b18dc0a.pdf">short-term reduction</a> in cryptomarket trading activity. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/60844/original/c447yh8x-1412559714.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/60844/original/c447yh8x-1412559714.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" srcset="https://images.theconversation.com/files/60844/original/c447yh8x-1412559714.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=397&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/60844/original/c447yh8x-1412559714.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=397&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/60844/original/c447yh8x-1412559714.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=397&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/60844/original/c447yh8x-1412559714.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=499&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/60844/original/c447yh8x-1412559714.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=499&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/60844/original/c447yh8x-1412559714.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=499&amp;fit=crop&amp;dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Alleged Silk Road founder Ross William Ulbricht was arrested in the Science Fiction section of the Glen Park Library on October 2, 2013. Silk Road 2.0 came online 35 days later, on November 6.</span>
<span class="attribution"><span class="source">Steve Rhodes/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Cryptomarkets are proving surprisingly resistant to attack by law enforcement.
Despite ongoing arrests, site closures, hacks, Bitcoin seizures and frauds, the online drugs business is not only persisting but is <a href="https://media.gractions.com/314A5A5A9ABBBBC5E3BD824CF47C46EF4B9D3A76/5f8d4168-c36a-4f78-b048-f5d48b18dc0a.pdf">estimated to be bigger than ever</a>. </p>
<p>An unprecedented number of illicit sites are in operation. Even the once-dominant Silk Road was recently <a href="http://www.digitalcitizensalliance.org/cac/alliance/content.aspx?page=Darknet">eclipsed in size</a> by another cryptomarket, the upstart Agora. </p>
<p>Cryptomarkets have shown a remarkable capacity to persist in the face of constant attacks by law enforcement and cybercriminals. It is worth reflecting on the factors that underpin the resilience of online illicit drug trading. </p>
<h2>Chasing clouds: the difficulty of cybercrime</h2>
<p>Technical and logistical complexity are undoubtedly the most prominent and commented upon factors that frustrate the efforts of law enforcement and contribute to the survivability of cryptomarkets. </p>
<p>Free yet incredibly powerful communications and encryption technologies conceal the identities, locations and financial transactions of those engaging in illicit transactions online. </p>
<p>Physical separation also complicates the work of investigators. Unlike conventional drug deals, illicit drugs ordered online are delivered through the post. This means that the vendor and consumer never meet face to face. </p>
<p>This also precludes the possibility for much of the violence associated with conventional drug dealing. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/60848/original/5rjw73z2-1412564588.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/60848/original/5rjw73z2-1412564588.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" srcset="https://images.theconversation.com/files/60848/original/5rjw73z2-1412564588.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=512&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/60848/original/5rjw73z2-1412564588.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=512&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/60848/original/5rjw73z2-1412564588.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=512&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/60848/original/5rjw73z2-1412564588.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=643&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/60848/original/5rjw73z2-1412564588.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=643&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/60848/original/5rjw73z2-1412564588.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=643&amp;fit=crop&amp;dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Traditional policing methods struggle to contain the contraband, drugs, laundered money and guns that stream through the internet.</span>
<span class="attribution"><span class="source">Scorpians and Centaurs/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Encryption and geographical separation make the policing of cryptomarkets extraordinarily difficult. Staples such as face-to-face “buy-bust” operations or raids on drug-dealing “hotspots” are impossible. </p>
<p>Gathering enough evidence to simply locate and identify online drug traders – let alone prove guilt in court beyond reasonable doubt – is a complex and resource-intensive process. </p>
<p>Another important, though less obvious factor that contributes to the resilience of online drug trading is the interdependence and mobility of users operating across multiple sites. </p>
<p>Drug vendors often post simultaneous listings on “seller pages” across different cryptomarkets. This allows them to continue trading if any individual site goes offline. </p>
<h2>Digital ‘refugees’ find a home</h2>
<p>Online consumers, on the other hand, appear to favour a single cryptomarket as a digital “home”. The strength of user affiliation towards individual cryptomarkets is demonstrated by the language employed to discuss movement between different sites. </p>
<p>When a cryptomarket is unexpectedly closed down, its users often describe themselves as “refugees” who are forced to “migrate” to different online spaces.
Interestingly, the discourse on online migration often follows similar refrains with regard to offline population movements. </p>
<blockquote>
<p>I migrated [a] couple weeks back … Lets make this a solid, safe and sounding community.
Agora user [18/5/2014]</p>
</blockquote>
<p>Digital migration strains the resources and infrastructure of destination cryptomarkets. As dealers struggle to meet increased demand, waiting times increase for their existing “native” customers. This creates potential for conflict between digital refugees and natives.</p>
<blockquote>
<p>There are very worrying signs of the times ahead if the new marketplace is to [sic] inundated with the refugees.
Silk Road 2.0 user [15/5/2014]</p>
<p>I have to say that I really really like Pandora but lately with all of the refugees, there has been many issues with downtime, timeouts and it has made it impossible for me to conduct business.
Pandora user [13/4/2014]</p>
</blockquote>
<p>Not all digital natives are hostile to newcomers, advocating instead support and tolerance towards refugees. This welcoming approach reflects solidarity between cryptomarket users in the face of ever-present and unpredictable external threats. </p>
<p>Intriguingly, the biggest blows to online drug trading have come not from law enforcement, but rather from fraudsters, hackers and other cybercriminals who populate the dark net. </p>
<p>Hacking attacks have breached the cyber-defences of numerous cryptomarkets, <a href="http://www.deepdotweb.com/2014/02/13/silk-road-2-hacked-bitcoins-stolen-unknown-amount/">looting millions of Bitcoins</a> left vulnerable in escrow accounts. </p>
<p>Several high profile cryptomarkets have also <a href="http://www.forbes.com/sites/andygreenberg/2013/12/01/silk-road-competitor-shuts-down-and-another-plans-to-go-offline-after-6-million-theft/">shut down unexpectedly</a> after site administrators absconded with their users’ funds. </p>
<p>The strength, resilience and interdependence of cryptomarket communities allow them to continue functioning in the face of this uncertainty; cryptomarket users never know if or when their own digital homes will come under assault from the forces of the state or from cybercriminals. </p>
<p>They are all too aware that they could be the next digital refugees in search of a new home on the dark net.</p><img src="https://counter.theconversation.com/content/31465/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This research is drawn from Drugs on the Dark Net, recently published by Palgrave Macmillan.</span></em></p>Recent media reports have once again put the public spotlight on cryptomarkets, the eBay-style websites operating on the encrypted dark net. They facilitate a vast and anonymous global trade in black market…James Martin, Senior Lecturer in Criminology, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.